Protection and indemnity insurance , more commonly known as P&I insurance , is a form of mutual maritime insurance provided by a P&I club . Whereas a marine insurance company provides "hull and machinery" cover for shipowners, and cargo cover for cargo owners, a P&I club provides cover for open-ended risks that traditional insurers are reluctant to insure. Typical P&I cover includes: a carrier's third-party risks for damage caused to cargo during carriage; war risks ; and risks of environmental damage such as oil spills and pollution . In the UK, both traditional underwriters and P&I clubs are subject to the Marine Insurance Act 1906 .
37-583: The Industrial Emissions Directive (IED) (Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control)) is a European Union directive which commits European Union member states to control and reduce the impact of industrial emissions on the environment. The directive aims to lower emissions from industrial production through an integrated approach. The directive uses
74-592: A carrier of goods by sea ). Should the Rotterdam Rules come into effect, they would cover not merely the sea voyage, but all parts of any contract of multimodal carriage with a sea leg. Thereafter, land carriers, warehouses, and freight forwarders would also need P&I cover. This would inevitably lead to an increase in the scope and importance of P&I cover, and might diminish the prevalence of standard cargo insurance. Conventional P&I cover has been taken up primarily by shipowners and demise charterers, but
111-442: A polluter pays to assign the cost of the updates to the plant. The plan to lower emissions is based on Best available technology to help reach the goals of the directive. The plan allows for flexibility given the best available technology; exemptions to the directive can be granted to firms as well if the cost is greater than the benefit. This directive has been amended with EU Directive 2024/1785. The European Commission undertook
148-454: A 2-year review with all stakeholders to examine how the legislation on industrial emissions could be improved to offer a high level of protection for the environment and human health while simplifying the existing legislation and cutting unnecessary administrative costs. Throughout Europe there is high acceptance that industrial emissions are the leading cause of pollution in Europe. As well there
185-453: A P&I club and any P&I club member who incurs reckless or avoidable losses to the club may be asked to leave. Thus, marine cargo is generally covered twice by insurance standards. The shipper or cargo-owner will be covered by a marine insurer likely with 'all risks' cover. The carrier or shipowner will be covered by the P&I club but will typically limit their liability to goods owners to
222-408: A carrier’s liability to a cargo-owner for damage to cargo, a shipowner ’s liability after a collision, environmental pollution and P&I war risk insurance , or legal liability due to acts of war affecting the ship. Marine insurers are usually for-profit companies that charge customers a premium to fully cover ships and cargo in the time period when the policy applies. In contrast, a P&I club
259-508: A directive in theory but has failed to abide by its provisions in practice. If a Member State fails to implement a Directive timely or correctly, the Directive itself becomes binding on the Member States, meaning that parties in proceedings against the state may rely on provisions of the untimely or incorrectly transposed Directive. An example of a case in which the applicant was able to invoke
296-599: A directive rather than a regulation: (i) it complies with the EU's desire for "subsidiarity" ; (ii) it acknowledges that different member States have different legal systems, legal traditions and legal processes; and (iii) each Member State has leeway to choose its own statutory wording, rather than accepting the Brussels' official " Eurospeak " terminology. For example, while EU Directive 2009/20/EC (which simply requires all vessels visiting EU ports to have P&I cover) could have been
333-576: A draft directive (if subject to the co-decision process, as contentious matters usually are) is prepared by the Commission after consultation with its own and national experts. The draft is presented to the Parliament and the Council —composed of relevant ministers of member governments, initially for evaluation and comment and then subsequently for approval or rejection. There are justifications for using
370-516: A further call to replenish the pool. The International Group of P&I Clubs is based on Leadenhall Street in London. These clubs cooperate to provide funds in the event of huge claims using a complex system to determine liability. The ancient Greeks created the practice of general average in Rhodos island, and ancient Romans could be said to have had a rudimentary form of marine insurance. However,
407-453: A new development is P&I cover for time- and voyage-charterers. Since these charterers may have no long-term relationship with any vessel, and may well have periods when they are not chartering at all, the mutual model based on common-pool sharing of liability is not necessarily ideal. Some non-mutual "charterers P&I clubs" have arisen whereby a private company may act as broker to provide third-party cover via underwriters, on payment of
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#1732852594296444-630: A novel type of insurance that one would recognise as modern emerged in the London "coffee shops" in the 19th century. Shipowners and charterers would seek underwriters to insure their ships, and cargo owners (whether shippers, importers or consignees) would insure their cargoes. Carriers soon realised that often they might themselves be at fault should cargo be lost or damaged at sea, and they sought to take out third-party indemnity insurance in respect of cargo liability. Underwriters showed an unwillingness to take on such open-ended risks, so shipowners responded by forming their own mutual P&I clubs, acting as
481-840: A regulation (without requiring member states to implement the directive), the desire for subsidiarity was paramount, so a directive was the chosen vehicle. The legal basis for the enactment of directives is Article 288 of the Treaty on the Functioning of the European Union (formerly Article 249 TEC ). Article 288 To exercise the Union's competences, the institutions shall adopt regulations, directives, decisions, recommendations and opinions. A regulation shall have general application. It shall be binding in its entirety and directly applicable in all Member States. A directive shall be binding, as to
518-483: A shipowner's co-operative. An advantage was that a club worked for the shipowners, thereby eliminating the underwriters' profit margins and making P&I Insurance significantly cheaper. In the second half of the 19th century, the number of claims greatly increased due to the number of passengers emigrating to North America and Australia. Shipowners became aware of their insurers' compensation limits, especially when it came to damages caused by ship collisions. While
555-463: A small fraction of the retail value of goods. If the cargo is lost or damaged, the cargo-owner needs to first make a claim against the shipowner. However, the shipowner may avoid liability if it did not cause the loss or if the Hague–Visby Rules grant exemption from liability. In that case, the cargo-owner will claim against its own insurance company. If the cargo-owner fails to claim first against
592-425: Is a mutual insurance association that provides risk pooling , information and representation for its members. Unlike a marine insurance company, which reports to its shareholders, a P&I club reports only to its members. Originally, P&I club members were typically shipowners , ship operators or demise charterers , but more recently freight forwarders and warehouse operators have been able to join. Whereas
629-607: Is high support for a system where the polluter will pay under a Polluter pays principle . The IED is intended to provide significant improvement on the interaction between the previous seven directives (including the Waste Incineration Directive ) which it replaces. It also strengthens, in several instances, some provisions in previous directives, for example the Large Combustion Plant Directive . Certain firms are allowed to apply for exemptions when
666-519: Is run as a non-profit co-operative and the insurance is financed by “calls”. Club members contribute to the club’s common risk pool according to the Pooling Agreement's rules . If the risk pool cannot cover current claims , the club members will be asked to pay a further call. If the pool has a surplus, the club will ask for a lower call the following year or make a refund to members. Only shipowners with acceptable reputations are allowed to join
703-625: The European Court of Justice developed the doctrine of direct effect where unimplemented or badly implemented directives can actually have direct legal force. In the important case of Francovich v. Italy , the ECJ extended the principle of Van Gend en Loos to provide that Member States who failed to implement a directive could incur liability to pay damages to individuals and companies who had been adversely affected by such non-implementation. Protection and indemnity insurance A P&I club
740-495: The UK Merchant Shipping Act 1854 had determined that, when evaluating insurance claims, the value of ships should be no less than £15 per ton, many ships had an actual lower market value and existing insurance policies did not cover this gap in liability. The compensation for collision damages also excluded a quarter of such damages. Existing hull insurance policies included damages to the insured ship and liability for
777-737: The amount that environmental salvors could be paid to mere "out-of-pocket expenses", with no allowance for any profit margin. As an antidote to this, the marine insurance industry and P&I clubs jointly developed the "SCOPIC clause", which is a codicil that may be appended to an LOF and invoked should the statutory payment provisions prove inadequate. The first SCOPIC clause was in 2000, and there have been several iterations since. Marine insurers offer insurance on measurable risks: hull and machinery insurance for shipowners, and cargo insurance for cargo owners. P&I clubs provide insurance for broader, indeterminate risks that marine insurers usually do not cover, such as third party risks. These risks include:
SECTION 20
#1732852594296814-437: The appropriate legislative procedure, both institutions can seek to make laws. There are Council directives and Commission directives. Article 288 does not clearly distinguish between legislative acts and administrative acts, as is normally done in national legal systems. Directives are binding only on the member states to whom they are addressed, which can be just one member state or a group of them. In general, however, with
851-470: The assured pays a premium to an underwriter for cover which lasts for a particular time (say, a year, or a voyage), a P&I club member instead pays a "call". This is a sum of money that is put into the club's pool , a kind of "kitty". If, at the end of the year, there are still funds in the pool, each member will pay a reduced call the following year; but if the club has made a major payout (say, after an oil spillage) club members will immediately have to pay
888-400: The cost of the best available technology is higher than the benefit. They will be evaluated using Cost–benefit analysis to decide if an exemption will be granted to the firm. Bulgaria is currently seeking an exemption for their whole fleet of coal fired power plants. The exemptions have allowed for a large amount of Europe's power plants to exceed the set standards. There is concern that if
925-539: The current marine insurance class. After 1874, many clubs added a marine indemnity class to respond to these new claims. This class was later merged with the marine insurance class reserved for the original protection risks and the distinction between the two classes virtually disappeared. After the Torrey Canyon grounding in 1967, covering the liabilities, costs and expenses of oil spills became an increasingly important aspect of P&I insurance. Following on from
962-522: The damages it had caused, while the maximum amount shipowners could recover after collisions was the ship's insured value, injured crew members might seek compensation from their employers. Later, the Fatal Accidents Act 1846 made it easier for passengers or their survivors to file claims . Perhaps the first protection association, the Shipowners' Mutual Protection Society, was formed in 1855. It
999-552: The directive may be expelled or refused entry into any EU port, although ships may be allowed time to comply before expulsion. As EU competence does not generally extend to penology , (see Re Tachographs (CJEU) 1979), the directive requires the member states themselves to set penalties for any breach. The Rotterdam Rules are a set of rules designed to replace the Hamburg Rules and the outdated Hague–Visby Rules (both of which are international conventions to impose duties upon
1036-542: The directive to be implemented correctly. This is done in approximately 99% of the cases. If a member state fails to pass the required national legislation, or if the national legislation does not adequately comply with the requirements of the directive, the European Commission may initiate legal action against the member state in the European Court of Justice . This may also happen when a member state has transposed
1073-572: The exception of directives related to the Common Agricultural Policy , directives are addressed to all member states. When adopted, directives give member states a timetable for the implementation of the intended outcome. Occasionally, the laws of a member state may already comply with this outcome, and the state involved would be required only to keep its laws in place. More commonly, member states are required to make changes to their laws (commonly referred to as transposition ) in order for
1110-486: The exemptions were removed some plants will be forced to shut down due to the increased cost associated with the best available technology. The passing of stricter laws now makes it harder for some plants to receive an exemption from the directive. European Union directive A directive is a legal act of the European Union that requires member states to achieve particular goals without dictating how
1147-621: The innovations of the LOF 1980 , the 1989 International Salvage Convention permitted salvage rewards to be made to salvors who acted to limit damage to the coastal environment after oil spills. Articles 13 & 14 of the Convention made provision for "Special Compensation", but the UK House of Lords case of the Nagasaki Spirit revealed that the convention had been poorly drafted, thereby limiting
Industrial Emissions Directive - Misplaced Pages Continue
1184-462: The member states achieve those goals. A directive's goals have to be made the goals of one or more new or changed national laws by the member states before this legislation applies to individuals residing in the member states. Directives normally leave member states with a certain amount of leeway as to the exact rules to be adopted. Directives can be adopted by means of a variety of legislative procedures depending on their subject matter. The text of
1221-711: The provisions of an untimely transposed Directive is the Verkooijen case, in which the European Court of Justice rendered a judgement on 6 June 2000 (case no. C-35/98). The United Kingdom passed a statutory instrument , the Unfair Terms in Consumer Contracts Regulations 1994 , to implement the EU Unfair Terms in Consumer Contracts Directive 1993 . For reasons that are not clear, the 1994 SI
1258-453: The result to be achieved, upon each Member State to which it is addressed, but shall leave to the national authorities the choice of form and methods. A decision shall be binding in its entirety upon those to whom it is addressed. Recommendations and opinions shall have no binding force. The Council can delegate legislative authority to the Commission and, depending on the area and
1295-498: The shipowner, but claims instead against its own insurance company, the insurer, having reimbursed its client, will through subrogation pursue the claim in its own right against the shipowner. The following are the major exceptions to P&I coverage: The European Union Directive 2009/20/EC was implemented in all 27 member states by January 1, 2012. The directive requires compulsory P&I to cover for EU and foreign ships in EU waters and ports. Foreign vessels that do not comply to
1332-437: Was deemed inadequate and was repealed and replaced by the Unfair Terms in Consumer Contracts Regulations 1999 . The Consumer Rights Act 2015 , a major United Kingdom statute consolidating consumer rights, then abolished the 1999 SI; so presumably the 2015 Act complies with the 1993 EU directive, which remains extant. Even though directives were not originally thought to be binding before they were implemented by member states,
1369-743: Was intended to compensate for loss of life, injuries and collisions that were excluded from marine insurance policies beyond the monetary limit of these policies. Similar associations were later formed within the United Kingdom , in Scandinavia , Japan and the United States . In 1874, the risk of liability for cargo carried by the insured ship was added to the insurance cover provided by a P&I club. Cargo value had risen and cargo underwriters , encouraged by UK courts, filed more claims to recover their losses from shipowners. These claims were not covered by
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